Going gloco: How glocalisation is working for vodka

18 June, 2015

ByChristine Boggis

It’s more than a decade since vodka staked its claim as the nation’s spirit of choice, ousting gin from the Office of National Statistics’ basket of goods used to measure consumer price inflation – and it has dominated the spirits market ever since.

In those days ads proclaimed the spirit’s neutrality and blendability, trumpeting the number of times it had been distilled and filtered and the pure message of major league global brands.

But although sales continue to grow – up 5% according to Nielsen and £37 million bigger than last year according to IRI – today vodka is coming under pressure from growing interest in categories that are considered more artisan, authentic and eclectic, including its old rival gin.

East London Liquor Company founder Alex Wolpert, who makes gin, rum, vodka and whiskey in a new distillery in Hackney, says: “Vodka has certainly taken a rear seat in the craft spirits explosion we are seeing now, and gin seems to be cannibalising some of the vodka sales both in the on and off-trade.”

“For too long vodka has been complacent with its lack of flavour and imagination, and its production methods,” says Sarah Thompson, owner of Blackdown Artisan Spirits in Sussex. “The new generation of drinkers want more than just a brand, they are looking for provenance and quality of ingredients, and large vodka brands have not reacted to this consumer demand.”

But now big brands – and some smaller ones – are reacting to demand for heritage and locally sourced spirits with some targeted “glocalisation”.

Glocalisation is a form of marketing in which major global brands tailor their offer to a local market – for example, in France McDonald’s abandoned global mascot Ronald McDonald in favour of homegrown cartoon hero Asterix the Gaul.

Now vodka brands are getting in on the act with marketing campaigns targeted at particular areas – such as Absolut Vodka’s Our/Vodka – “a global vodka made by local partners in cities around the world”.

Michael Vachon, head of brand development at Maverick Drinks, says: “As consumers have chosen to support more products with real provenance to them, we’re seeing a trend of glocalisation. Absolut’s Our/Vodka campaign is a great example of this, but I think you’ll increasingly see more global brands trying to tie themselves to locality and a sense of place.”

Danny Fagan, brand manager for Irish vodka Boru, agrees: “A large trend we are noticing gaining a lot of traction in the off-trade is brands focusing on local ties. Large vodka brands have been investing their marketing efforts in promoting key markets in order to play to millennials’ interest in local products.”

Of course the trend is also positive for homegrown distillers, who are already local so don’t need to go “glocal”.

Blackdown’s Thompson says: “There is definitely a trend to drinking English and American vodka, as an alternative to the eastern European cousins. Craft producers are more experimental and have the flexibility and passion to create truly unique products which stand out in an ever-changing market.”

Paul Currie, founder and managing director of The Lakes Distillery, says: “Spirits such as gin, dark rum and Scotch whisky have become more popular as they have moved in a more artisan direction, with taste and provenance becoming more important to the consumer, and over the coming years I think this will also be the case with vodka.

“Up until now there has been limited interest from the consumer in where a vodka is made, or even in how it tastes, with well-known brands or price being the deciding purchase factors – this will change. Consumers are looking to ‘drink better’ and to have a greater knowledge about what they are drinking.”

Local spirits and glocalisation are all part of a shift towards premiumisation in vodka, as in most spirits categories.

Nielsen senior client manager Robert Zielski says: “Many brands in the premium area are in growth – Grey Goose, Stolichnaya and Zubrowka to name a few. We expect this premium trend to continue going forward. However, a cut in spirits duty is something that the more value focused brands may benefit from.”

At IRI, head of BWS Toby Magill agrees. “Value growth is outstripping volume, suggesting there is a premiumising effect in the category, either through brand choice or driven by promotional mix,” he says.

Barnaby Richardson, marketing manager for U’Luvka vodka distributor Love Drinks, says: “The dominance of superbrands has led to the opportunity for smaller luxury brands such as U’Luvka, with heritage and a strong flavour profile, to provide off-trade consumers with a super-premium alternative that actually talks about the quality of the product, not just the emotional benefit.”

He says: “Over the past year, the market for luxury vodka has grown by 28% and Cîroc is clearly at the forefront of this success, growing by 70% over the same period.

“Consumers are becoming more adventurous with their drink choices at home and love experimenting with different cocktails and flavours, and this is where the opportunity lies.”

Boru’s Fagan says retailers should practice their own brand of glocalisation and target sales squarely at their consumers.

He says: “Learn the tastes of the local consumers and stock the types of vodkas they would be interested in. Learn the buying habits of your consumers and follow them. Variety is good, but in such a saturated spirits category, there is no need to pack your shelves with as many brands as possible.”

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